Birmingham has been warned it needs greater integration of its ethnic minorities to ease racial tensions and hostility towards asylum seekers and refugees.

Although it has been hailed as a successful multi-cultural city, misconceptions and fears are being fuelled by residential segregation of white and ethnic minority communities, according to a left wing think tank.

The study by the Institute for Public Policy Research examined attitudes in Birmingham, Camden, Cardiff, Norwich and Weymouth towards asylum seekers. It found many white people simply used the term to describe anyone who was not white, including people born in Britain.

About one-third of Birmingham residents are from visible ethnic minorities but the report warns: "Birmingham was different from the other areas because although it has a long history of immigration and the highest minority ethnic population of all the research areas, the city is strongly residentially segregated.

"Integration is an issue of concern for Birmingham City Council as black and minority ethnic groups are not evenly distributed throughout the city and are overrepresented in deprived areas.

"The combination of high minority ethnic population density with largely racially segregated housing means that fear of visible minorities is not offset by a large degree of meaningful contact with neighbours or other acquaintances."

The institute and the Refugee Council said the report highlighted the need to tackle misconceptions that were increasing hostility towards asylum seekers and distorting the immigration debate.

Miranda Lewis, IPPR senior research fellow, said: "The most negative views are based on wildly inaccurate beliefs on impacts but are felt deeply by people who feel vulnerable about access to public resources. To reverse this trend we cannot simply blame the tabloids, an illiberal white working class or the Government.

"We need a new approach where local authorities play a stronger role in policy, implementation and communication."

Sami Aziz, deputy director of regions for the Refugee Council said: "Much has been done by a variety of agencies to tackle negative attitudes across the country, including here in Birmingham.

"It is a hugely diverse city, and while our clients do sometimes experience hostility, many have received a warm welcome from their new neighbours and have been immensely proud to contribute to life in Birmingham."

The study, which involved 32 focus groups - including a representative mix of people from different ethnic groups and income brackets - concludes: "Respondents living in Birmingham had the most negative attitudes overall.

"There was considerable hostility to asylum seekers. Concerns centred on crime perceived to be committed by young men, who were believed to hang about in the city centre causing trouble; resentment over perceptions that asylum seekers were given unfairly prioritised access to services; and fears that British identity and values were being threatened by immigration."

The report found a majority of white participants felt British identity was under threat as a result of increased immigration, to the extent that many people described a sense of being in a "white minority".